Seventh Circuit Reverses Erroneous Rule 12(b)(1) Dismissal of IDEA Claim that Was Based on Plaintiff's Failure to Exhaust

The Seventh Circuit in Mosely v. Board of Educ. of City of Chicago, --- F.3d ----, 2006 WL 12982 (7th Cir. Jan. 04, 2006), has reversed a district court's dismissal of an IDEA action for lack of jurisdiction based on the mother's alleged failure to exhaust administrative remedies. Because the failure to exhaust is a waivable affirmative defense, said the court, it was inappropriate for the district court to grant a Rule 12(b)(1) motion to dismiss merely on the basis of the plaintiff's complaint. Here is an excerpt from the opinion:

As we noted earlier, the district court dismissed No. 03-4074 on “jurisdictional” grounds because Mosely failed adequately to allege that she exhausted the IDEA's administrative remedies. The district court should not, however, have ascribed such fundamental importance to a failure to allege exhaustion. As the Supreme Court has recently reminded us in Eberhart v. United States, --- U.S. ----, 126 S.Ct. 403, 163 L.Ed.2d 14 (2005), “[c]larity would be facilitated ··· if courts and litigants used the label ‘jurisdictional’ not for claim-processing rules, but only for prescriptions delineating the classes of cases (subject-matter jurisdiction) and the persons (personal jurisdiction) falling within a court's adjudicatory authority.”126 S.Ct. at 405 (quoting Kontrick v. Ryan, 540 U.S. 443, 455, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004) (internal quotation marks omitted)). In the past, this court has described the exhaustion requirement found in the IDEA as a claims-processing rule, pointing out that “lack of exhaustion usually is waivable, as lack of jurisdiction is not.” Charlie F. v. Bd. of Educ. of Skokie Sch. Dist. 68, 98 F.3d 989, 991 (7th Cir.1996).

A number of consequences flow from this basic fact. First, the district court should not have turned to FED. R. CIV. P. 12(b)(1) when it decided the motion to dismiss. A failure to exhaust is normally considered to be an affirmative defense, see, e.g., Walker v. Thompson, 288 F.3d 1005, 1009 (7th Cir.2002), and we see no reason to treat it differently here. That means that the earliest possible time to consider it would normally be after the answer has been filed, if it is possible to decide the issue through a Rule 12(c) motion for judgment on the pleadings. Parties and courts occasionally take short-cuts and present certain arguments through a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), if the allegations of the complaint in the light most favorable to the plaintiff show that there is no way that any amendment could salvage the claim. Mosely's case is not a candidate for that treatment, however. She had no obligation to allege facts negating an affirmative defense in her complaint, see Tregenza v. Great Am. Communications Co., 12 F.3d 717, 718 (7th Cir.1993) (citing Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980)). There is nothing on the face of her complaint that compels a conclusion that she failed to exhaust. Her case must therefore be remanded to the district court for further proceedings.